NSE to launch natural gas derivative contracts based on IGX’s benchmark price index

National Stock Exchange of India Ltd (NSE) has announced a collaboration with Indian Gas Exchange (IGX) to introduce exchange-traded derivatives based on natural gas traded and delivered on the IGX platform. 

This is towards strengthening India’s domestic natural gas market with the aim to provide efficient risk management tools, NSE said.

As part of this collaboration, NSE will launch Indian natural gas derivative contracts based on IGX’s benchmark Price Index GIXI (Gas IndeX of India). The contracts will be designed to reflect domestic gas market dynamics, with pricing linked to actual trades on the IGX platform.

“These contracts aim to provide a transparent and reliable risk management mechanism for stakeholders across the gas value chain and provide the financial institutions, exchange registered brokers and investors an investment tool to invest in the domestic natural gas market derivatives,” NSE said.

It has received approval from the Securities and Exchange Board of India (SEBI) to launch the Indian Natural Gas Futures. Launch dates for the contract will be announced shortly.

Sriram Krishnan, Chief Business Development Officer (CBDO), NSE, said, “Our collaboration with IGX represents a significant milestone in the development of India’s gas ecosystem. The collaboration enables NSE to become the first ever Indian Exchange to launch a

domestic benchmarked Energy derivatives contract.”

“By introducing derivatives based on IGX benchmarks, we aim to create robust risk management tools that are closely aligned with the domestic physical gas market. We believe that Indian Natural Gas futures will enhance market efficiency, deepen liquidity, and support the growth of a transparent and competitive gas market in India,” he added.